How Southface seeks to lead today’s market for talentMary Bear Hughes
As nonprofits in a tight talent market, we’re increasingly competing with the for-profit world for talent, whether we’re trying to attract talent to our organizations or keep our high-potential leaders from being recruited away. We can’t always count on outstanding, mission-oriented individuals to accept lower salaries and stay for the long term. It is essential that we establish talent management practices that attract, develop, and reward our most valuable resources – especially when for-profit companies are increasingly adopting social responsibility initiatives that aim to attract the same mission-focused talent.
One organization that’s meeting this challenge is Southface Institute, the Atlanta-based nonprofit dedicated to sustainable development and green building, which made a commitment in 2015 to equity and transparency in pay that’s baked into their most recent strategic plan, backed by extensive research and certified under the JUST label, which is managed by the International Living Futures Institute (home to the world’s most rigorous green building standards). In short, their efforts are aimed at bringing every employee’s salary in line with industry standards and operating under a completely transparent schedule for pay ranges, increases, and promotion opportunities.
To help Southface develop their new approach, they secured the help of GCN Consulting Group. I worked with Beth Exline, Southface Director of Talent Management, over the course of a year to benchmark salaries and help them develop a plan to match and work towards “Best in Class” compensation.
At the same time, Exline and her fellow Southface leaders – including President Andrea Pinabell and new CFO Barry Coates – worked to make sure the Southface team understood the updated salary standards. They also made a point to inform the community: When Exline presented on Southface’s JUST label at their annual Greenprints conference, Southface Director of Education and Research Shane Totten wanted her to answer the question, “Why did Southface pursue JUST certification?” The real question, said Exline, was “Why not? Pursuing JUST certification is something every organization should do.”
In the conversation that follows, I asked Exline to explain how Southface decided to take on this challenge, what it took to convince the board and other stakeholders it was a goal worth pursuing, and how they’re implementing changes to ensure their people are fairly compensated and fully informed.
How did you decide, as an organization, to pursue equity in pay in this way?
Exline: Benchmarking salary ranges was something that came out of our JUST label application, from the International Living Futures Institute (ILFI), which is a transparency platform that measures an organization’s commitment to social responsibility across 23 different measures. Shane is an architect who is very familiar with green building certifications, and he came up with the idea. The ILFI is a relatively new organization, and we recognize the importance of being a pioneer – it’s just the way we operate. It’s a really nice way to communicate, both internally and externally, that we value our staff. Being true to our Core Beliefs requires that we walk the talk. That’s the direction I had wanted to go in, and this gave me a reason to move forward and proof of best practices.
"Prior to the salary study, we had no way to demonstrate that we were paying equitably across the organization."
Our leaders, including the board of directors, are outside-the-box thinkers, so I have the commitment from them to really move on this, which is why it’s part of our current strategic plan. With the data that you provided us initially, Mary, we found that we were ahead of the market for total compensation – but that’s because of our contribution to benefits. Part of the JUST certification was looking at salary and gender equity.
Prior to the salary study, we had no way to demonstrate that we were paying equitably across the organization. With our new salary structure in place, we were happy to demonstrate that our gender pay scale program is working; we were pleased to see that, for the most part, we were paying employees within the ranges we initially established. Part of the long-term strategy that I’m working on with our CFO is leading the nonprofit marketplace in average salaries across all roles.
How did you roll out the changes to staff? What have been the challenges in communicating them?
Exline: We post our policies and communicate with staff our commitment to update salary ranges. We put together a general job description for each position category, which includes what the salary range is, and what it means to be in the various quartiles of that range. Each quartile is defined by a certain level of performance, leadership, experience, and core competencies.
The biggest hurdle is educating employees about where they are within the range, and why they belong where they are. For example, the third quartile is the career level, and that’s where people are going to stay for a long time. The fourth quartile is kind of the exception – a lot of times that means you’re ready for a promotion, which could trigger a discussion about the professional development you need to advance to a new role.
"The biggest hurdle is educating employees about where they are within the [salary] range, and why they belong where they are."
We have a group of really high performers here. They set the bar for excellence, but for a lot of them, it’s only the first or second place they’ve worked, so they don’t have a lot of context for performance increases, or salary ranges. Some are comparing their salary against the crowd-sourced data that’s out there. One of the things we do annually is provide every employee a letter of total compensation. This year, their total compensation letter will include the salary range for their position, where they were within that range last year, where they are within the range with their annual increase, and why. We want it to be completely clear and transparent.
One of the things we found was that there were certain positions where pay was falling below the bottom of the range, and others who were maxed out. I remember that we talked about the delicacy of the communications on those issues.
Exline: We handled the outliers in one-on-one conversations. Everyone outside the low end of the salary range received a salary increase that brought them into the range. That was not a heavy lift. There were a couple outliers beyond the high end, but because we had data to show them – this is what we’re doing and why – they understood. We also calculated the increase they were due, based on their performance, and paid it in the form of a bonus, instead of a salary increase. They were rewarded for their performance; they were just awarded in a different way.
With the update to our salary ranges, everyone is now within the posted salary range for their position. And we’re committed to continue updating salary data year over year – whereas many organizations do that about every three years – with the goal of leading the marketplace.
Why do you feel it’s important to lead the market in salary?
Exline: To me, it’s all about the value of the work that our Southface team provides. We have the best and brightest working here, and I want them to feel that they’re valued. I also want our funding partners to understand that compensating people fairly is really important for us to recruit and retain talent.that can match our organizational standards. We tend to over-deliver in the name of customer service, as many nonprofits do, which has contributed to salary compression over several decades.
"We tend to over-deliver in the name of customer service, as many nonprofits do, which has contributed to salary compression over several decades."
I want my colleagues to have a comfortable quality of life, and I don’t think that’s too much to ask. There’s a whole generation of young people who have to make difficult financial choices because they have a student loan burden that previous generations haven’t had – especially in the environmental and community development space, where advanced degrees are frequently necessary.
Ultimately, we are deeply excited by the way these ongoing efforts to respect our team with competitive salaries can help us emulate Southface’s efforts to improve equity across all the work we do.
Mary Bear Hughes is a senior consultant with the GCN Nonprofit Consulting Group, and leader of the executive search and transition practice.